Free Trial
US TSY FUTURES

BLOCK, Late 30Y Buy

EURJPY TECHS

Corrective Cycle

US TSY FUTURES

BLOCK, 10Y Buy

PIPELINE

$500M JBIC 5Y SOFR Sole Issuance

COMMODITIES

Oil Surges From A Host Of Factors

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Trends Extend, With GBP, EUR, CNH And Others Touching New Cycle Lows

FOREX
  • The persistent rally in the USD Index is extending through the London close, with the greenback hitting new cycle highs of 112.866.
  • The move has been exacerbated by the protracted weakness in GBP (making up around 12% of the USD Index) following the UK mini budget earlier today. A number of sell-side analysts have revised lower their near-term forecasts for currency, with Citi now expected GBP/USD to trade in a range of $1.05-1.10, raising the risk of a "confidence crisis" in the currency. Similarly, JP Morgan write that the UK rate market's reaction today is a sign of a "broader loss of confidence in the government's approach".
  • Support for GBP/USD has proved ineffective on today's sell-off, with markets reaching new multi-decade lows of 1.0897. This narrows the gap with levels last seen in 1985 - with 1.0520 printed in February of that year.
  • Friday's fiscal statement - marking the most significant wave of tax cuts in a generation - will cause considerable uncertainty for BoE rates policy, with SONIA futures falling sharply throughout the day and prompting BoE rate pricing to spike to an implied rate of near 5.50% for the August 2023 meeting.
  • GBP/JPY also a notable mover given Thursday's BoJ intervention. The cross approaches support at 155.60 ahead of 155.17 - the 76.4% retracement for the March - June upleg.

220 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • The persistent rally in the USD Index is extending through the London close, with the greenback hitting new cycle highs of 112.866.
  • The move has been exacerbated by the protracted weakness in GBP (making up around 12% of the USD Index) following the UK mini budget earlier today. A number of sell-side analysts have revised lower their near-term forecasts for currency, with Citi now expected GBP/USD to trade in a range of $1.05-1.10, raising the risk of a "confidence crisis" in the currency. Similarly, JP Morgan write that the UK rate market's reaction today is a sign of a "broader loss of confidence in the government's approach".
  • Support for GBP/USD has proved ineffective on today's sell-off, with markets reaching new multi-decade lows of 1.0897. This narrows the gap with levels last seen in 1985 - with 1.0520 printed in February of that year.
  • Friday's fiscal statement - marking the most significant wave of tax cuts in a generation - will cause considerable uncertainty for BoE rates policy, with SONIA futures falling sharply throughout the day and prompting BoE rate pricing to spike to an implied rate of near 5.50% for the August 2023 meeting.
  • GBP/JPY also a notable mover given Thursday's BoJ intervention. The cross approaches support at 155.60 ahead of 155.17 - the 76.4% retracement for the March - June upleg.